Six supervisory board meetings with key decisions

In the financial year 2009, the Supervisory Board held six Supervisory Board meetings and additionally took several decisions outside of meetings. All members of the Supervisory Board attended more than half of the meetings in the year under review. In urgent cases, the Supervisory Board passed resolutions in writing in consultation with the Chairman of the Supervisory Board.

Key areas of the discussion of the Supervisory Board in the reporting year were the capital increase for subscription rights, the continuation and finalisation of the reorganisation of the Group, the business planning, and the implementation of the migration of the IT systems. Other regular items of discussion were business development in leasing and sales, sales projects, and the Group’s financial and liquidity position.

In the ordinary meeting on 31 March 2009, the Supervisory Board concentrated on the reports from the Supervisory Board committees, the development of the financial year 2008, the financial statements 2008, the preparation of the ordinary Annual General Meeting 2009, and the migration of the IT systems. The board also discussed the status of the redress procedure against the EK 02 compulsory taxation introduced by the annual tax law 2008. Representatives of the auditor of the company were present during the discussions on the annual financial statements 2008 and commented on the items and estimates in the company and Group consolidated financial statements.

In the first extraordinary meeting on 28 April 2009, the improvement of the capital structure and in particular the operating cash flow and rent development in view of the current portfolio structure were under discussion. There was also a debate about a possible increase in the authorised capital by decision of the ordinary Annual General Meeting 2009. The Supervisory Board approved the agenda to be presented at the ordinary Annual General Meeting 2009 in the meeting.

The second regular meeting took place on 16 June 2009 before and after the ordinary Annual General Meeting. We discussed here above all the recommendation to the Annual General Meeting on the adjustments of the authorised capital and generally on the ordinary Annual General Meeting 2009 and on the revised standard operating procedures for the Management Board and the Supervisory Board. In addition, possibilities for strengthening the equity for investment projects such as the implementation of a capital increase for subscription rights in the second half of 2009 were discussed.

Based on this, we discussed specifically the implementation of a capital increase for subscription rights and possible framework conditions in this context in the second extraordinary meeting on 23 June 2009. On 24/25 June 2009, we decided by way of circulation to propose the resolution of a capital increase for subscription rights to an Extraordinary General Meeting.

In the third regular meeting of the Supervisory Board on 15 September 2009, we discussed the status of the preparation and implementation of the capital increase for subscription rights, particularly in terms of the pricing, in great detail. The Management Board also reported on the business development of the year under review. In a decision taken by telephone on 21 September 2009, the Supervisory Board approved setting the strike price for the capital increase for subscription rights to EUR 4.50 per share.

In the fourth regular meeting on 10 December 2009, the Management Board reported extensively to the Supervisory Board on the business development in 2009, and presented and explained the business plan 2010 to the Supervisory Board. The Supervisory Board discussed both intensively. We received moreover information on the current status of the reviews regarding the commitments toward DB Immobilienfonds 14 Rhein-Pfalz Wohnen GmbH & Co. KG. The Supervisory Board discussed the status of compliance in the Group based on the draft of the declaration of conformity presented to the Management Board. The release of the declaration of conformity in its published form was decided by way of circulation.

My Annual Report